Category: trial conversion

How do you grow from trial to paying users? The freemium business model is popular with many cloud-based companies but depending on company size, the user experience for trial users is different each time. We sat down to discuss smart conversion metrics for the freemium business model with Vik Chaudhary VP of Product Management and Corporate Development from Keynote Systems. Keynote is experimenting with free mobile apps to drive demand and leads for their paid enterprise solutions.

It’s important to figure out how deeply your trial users are using your product. Here are some metrics to consider:
– Are they downloading your software?
– Are they registering for your service?
– How often are they logging in to the service?

The ultimate goal is to figure what they are doing within your service and how to get them to upgrade to your paid features. Identifying the right conversion metrics will allow you to more accurately target your users and extend the lifecycle of your relationship with them.

Video Transcript:
Hi, my name is Vik Chaudhary and I’m VP of Product Management and Corporate Development at Keynote Systems. At Keynote, what we do is test and monitor the online user experience for companies that are online or have a mobile presence. When you talk about premium business models, there’s really two kinds of premium.

One is if you’ve got a product that’s used by hundreds of thousands or even millions of users. Starbucks is a great product for that. The other one is a product that may be a premium product used by a smaller number of enterprises. We’re talking about maybe tens of thousand of companies using this.

When you have a premium product for the latter, it’s a very different kind of experience that you have to measure. When we talk about premium business models, you really have to think about who is buying your product. On one end, it could be a product like DropBox, which is bought by consumers or by small businesses.

And that could be used by millions of users. On the other side, it could be a product that’s used by tens of thousands of enterprises. So when you think about a premium business model, you really have to think about who’s gonna be buying it and how do you build conversion metrics into the process of going from trial to paying users.

When we start thinking about how do enterprises evaluate and use our products, we really have to go for metrics such as downloading a product, registering for it. But how do they deeply begin to use the product? Are they creating a test script, for example? Are they begging to play back the test script?

How many websites are they testing? How many times are they logging into the product? So as we begin to look at our funnel, we’re really thinking about, what are the users doing here? They’re logging in. They’re logging in many times, they’re creating test scripts, they’re testing their own websites.

Are they coming from existing customers, or are they completely new to Keynote? Those are the kinds of conversion metrics that we think about.

Do you know how it is that your company gets more and more leads then your sales people can handle but it’s still won’t justify hiring another sales person for your team?

Well, in many cases it’s just the case that your sales people need a “small push” that would help them understand which leads to refer first and that would make the difference on your customer onboarding picture.

Being at the Sales 2.0 conference, I’ve met Adon Rigg, the author of Insightful Selling, which told me that he too was enlightened to find tools which help in capture data, filter it and then analyze it in a way that could direct salespeople to focus on the most converted opportunities.

So how do we know who to focus on? easy – we’re gathering information from your metrics, build your cohort analysis and make the thinking for you. All you need to do is focus on the opportunities we offer and watch how your trial conversion is being increased!

Hi, my name is Adon Rigg, author of Insightful Selling, and I’m just finishing up the Sales 2.0 conference here in San Francisco, which was absolutely fantastic.
My main takeaway would be that there are a lot of tools available such as some of the vendors here today which allows you to use programs and tools to capture information, filter that information and then put analytics or numbers to help make the efficiency of a salesperson a lot better and to help make them more effective in the field

We’ve held yet another very interesting lean-startup meetup on Thursday to discuss free to paid conversion best practices for cloud applications.
First, please find within the presentation I’ve used. It’s a collection of many ideas we’ve been working on at Totango collected into idea presented by this presentation.

I emphasized during the talk the need to focus on the ‘evaluating’ users – the ones that their actions indicate genuine intent to come up with a buying decision.
Many people still wanted to understand what to do with the other group. The short out of the sleeve answer would be: “It depends ”. Seriously, this question deserves a blog post on it’s own which I’m going to write later this week.

In the mean time, please feel free to enjoy the presentation. You will be able to learn a lot also by starting a ‘free trial’ for the Totango trial conversion product. So here’s the link for that as well.

If you enjoy this content, please be kind and share it with your friend. The links are above and below.

In the next couple of weeks I would like to share some short video interviews on relevant subjects taken at several events I’ve been to.

At the Enterprise 2.0 Conference, I’ve met Eric Montoya from BadgeVille and interviewed him about the ways to convert from visitors to signups and from freemium to paid users.

These topics are highly relevant to every SaaS business and I’ve been writing a few posts about it lately, including my previous post.

In this interview, Eric explains how the conversion process become a simple mechanism when you find unique and fun ways to get your users to know your product by gentle guides or creating a feedback system that is presented back to the end-user once they conducted a series of behaviors that we wanted them to.

Eric also gave some interesting examples in which he mentions a 500% lift for a unique application of Samsung – view the interview to learn more

Tomorrow I will upload another interview from the Enterprise 2.0 Conference. This time Jessie Wilkins, Director System of Engagement for aiim will talk about how the document system era evolved to the system of engagement era.

“My name is Eric Montoya, I am with sales and business development here at BadgeVille. You know, there is a couple of really, really unique things that happen within the context of any sort of online community or any sort of interaction with the product, the first is some sort of anonymous or local capture, right?

How do i get that person who has just come to my platforms, to my products and my brand and what can I do to try to capture them at that point? How do I convert them, maybe from fremium to paid and all of those mechanics that go along with could be something as simple as a mechanism like gentle guide or something where I am taking a series of behaviors or actions and presenting that back to the end user in some sort of unique, very step oriented, fun way with that getting feed back as they through all of the interactions learning the platform, taking a steps in necessary to become engaged within the product, but they are doing it in a way that’s very controlled and really wrapped around the behaviors and the actions that you want dozen users to perform.

Us, like our kind of broad, you know, 100 plus customers that we have now, we’ve seen, you know, strategic impact to the goals and objectives tied to a lot of those specific behaviors in the, like, 25 to 30% range, if you want to be very broad.

When you look at very, very unique applications or specific behavior such those users are performing. Samsung, for example, has just put out this last week that they are seeing a 500% lift on some of the drive and user engagement and actions that are very relevant to the success of their community.

Things like rating and reviewing and interacting with the product and the brand overall. So, you know,we have seen a lot of variance but the impact, you know, whether that’s 10%, 50% or 500%, absolutely the numbers are there.”

This is especially important for lean startups and high velocity sales businesses, where there are a relatively high number of prospects as compared to the number of sales and marketing resources.

However, prioritizing your time in a self service sales model is changing as compared to the traditional enterprise model where every prospect requires sales touch. Consider these reasons
why a prospect may not be ‘Mr. Right’ or ‘Mrs. Right’ in the traditional sales model (as mentioned in Anthony’s blog):

#1 – When a Prospect Has No Money. The art world’s ‘starving artist’ is the ‘struggling start-up’ of business. Both may produce beauty, but without a stable income neither is worth bringing
home to your parents.

#2 – When a Prospect Has Too Much Money. They have big ideas and big budgets to make them happen—they just need your software, customized almost beyond recognition; causing too much work and distraction.

#3 – When a Prospect Is Dissimilar. Trust, communication, shared values, and a united vision for achieving goals are all factors of a great relationship.

Interestingly, if you are offering an online, self service trial for your service and have a low touch or zero touch sales model, you may not need to be too concerned about these factors
upfront. You can let customers self qualify through your sales funnel. It is ok to have any of these three customers sign up for a trial. Then actions speak louder than words. When a prospect
is active during the trial and engages with your product as-is, he is probably worth your time.
If, on the other hand your prospect never logs into the free trial or is aggressively calling your support team, it may be worthwhile finding yourself another ‘date’.

It was a jam packed day at Sales 2.0 in Santa Monica today. It was a great opportunity to meet with and learn from some of the brightest in the Sales 2.0 community. I have summarized my key takeaways for Sales 2.0 leaders below:

#1 – Attract many, then focus on filtering

If your prospects do research online, will they find your company, or your competitor? Mark Roberge, VP Sales from HubSpot argued that you should keep the top of your sales funnel as broad as possible. Attract as many people as possible to your website through good content. HubSpot itself is attracting 50,000 leads a month, of which 40% get passed to the inside sales team and about 400 (or less than 1%) convert into new customers. The leads that don’t convert still help to reinforce the HubSpot brand and trust. With so many leads, strong filtering and lead scoring algorithms are keys to sales success.

#2 – Give all sales people a social media address

Scott Holden, Senior Director at Salesforce.com argued that not just companies need to be discoverable, but also individual sales representatives. Social pages are often the first ones to come up in search results. Darren Suomi, VP Sales from HootSuite called it “giving all sales reps a social media address”. He said it is no different from issuing a rep a cell phone and e-mail. IBM indeed has done just that, said Douglas Hannan, BU Executive at IBM: all 1,000 IBM sales reps have a web page with built in 2-way video and chat. They are also asked to get on Twitter and LinkedIn. IBM marketing maintains a social messaging calendar to make it easy for reps to find content to post.

#3 – Deliver value first, sell later

Jim Cathcart, the well-known author of “Relationship Selling”, defined what customer relationships are all about: in a relationship people know each other and have an exchange of value. Ask yourself: who is truly glad to know me? In a sales relationship, provide value first, sell later. Don’t talk about up selling customers, but rather up serving them. If you do a good job others will vouch for you and recommend your services. Scott Holden summarized this as moving from self-promotion to social referrals: “trust me, he is a great lover” and not “I am a great lover”. I expressed a similar sentiment in my blog earlier this week on Genuine Customer Engagement.

#4 – Use online demos to drive sales

Salesforce.com recently did a survey of 1 million influencers in the buying process and found that 50%-70% of sales processes start long before a sales person ever gets involved. The most important deciding factor in the sales process was “online demos”, not sales person interaction. HubSpot data points in the same direction: the most reliable indicator that a lead will convert into a customer is a request for a demo (46%) as compared to download a white paper for example (22%). As we discussed in many blogs including Trial Conversion is Top Priority in SaaS, I would add that interaction with a free trial version of your product has an even higher correlation with conversion to customer.

#5 – Consider a territory model based on social proximity

A somewhat radical idea was presented by Michael Lodato from Network Hardware Resale. He argued that in a commodity business (he sells network hardware) buyers are deciding based on personal relationships and customer service. Therefore he moved to an open territory model, where leads are assigned based on the personal relationship of a rep to the lead, rather than geography. On paper this social proximity model sounds great, but in reality it is still difficult to implement. Michael admitted to have a team of marketers manually assigning leads based on social parameters.

#6 – Move towards a lower touch model

Gerhard Gschwandtner pushed speakers to learn from B2C selling models: Amazon has $30 billion in sales with ZERO sales reps. B2B companies need to learn from this and move to lower touch selling models, wherever possible. One of the speakers, Rini Das from PAKRA, has achieved just that. She is closing 95% of her business based on social media leads. She has hardly met any of her clients in person, but is still doing $30,000 to $150,000 in revenues per customer each year.

“The process went something like this: ask the analysts about the next big thing, collect requirements into and RFP, get a list of vendors from a roundup in an industry magazine, go to a trade show and collect collateral, solicit and evaluate RFP responses by mail or fax, call in a short list of vendors to do a dog and pony show, follow up with a technical drill down meeting, maybe do a bake-off or a pilot, select a vendor, call a reference account, negotiate final pricing and contract terms, and wrap it all up by planning out phase 2 of the project: a complex and expensive implementation.”

The new breed B2B buyer: it’s self-service stupid!

“With such a treasure trove of information available online, the Internet is the 21st century B2B buyer’s first stop for researching products and services. Your strongest strategy is to give the prospect efficient self-service access to your content.”

“In the case of most SaaS and cloud applications, the entire B2B buying process is cheap: trial is free and purchase amounts to a monthly subscription that can be canceled at any time. So in addition to reading about the product, the barriers for a customer to go ahead and just try your product itself (even without a lot of upfront research) are low.”

Long story short, the key to the wallet of the new B2B buyer:

Instant online gratification through efficient self-service

So it’s no surprise that many SaaS companies spend their marketing dollars on content creation and inbound marketing, and invest in marketing automation to track campaign ROI.

Good. But not enough. According to Joel.

“Inbound marketing or simply getting found by a prospect is not enough. Once you are found, you must engage with that prospect frequently and consistently throughout the entire customer lifecycle, because if you don’t, your competitors will, and what is easily found can be just as easily lost.”

What’s worse, simply accessing your content may no longer be a reliable indicator of purchase intend. Joel uses the term “fuzzy funnel” to describe the undeterministic process that customers follow these days: the new B2B buying process is anything but linear, deterministic and under the B2B salesperson’s control.

So what comes after inbound marketing? If accessing your content is no longer a reliable indicator of purchase intent, then how to best measure customer interest?

I asked Joel some questions on it via e-mail and got his permission to publish his answers on this blog:

Do you see more B2B buyers demanding instant and self-service access to the product or service (rather than just to information and education about the product)?

Joel: I think in general, B2B buyers want a trial whenever it is possible. A brochure or a video is great, but they are no substitute for test driving the actual product you plan to buy. It’s more educational, more convincing, and more comforting to see the real thing. And, given the choice of getting it immediately without a salesperson looking over their shoulder vs. scheduling a demo or a pilot that will be designed to hide any flaws, most B2B buyers will choose the former. However, I prefaced all this with “whenever it is possible.” Some products are so complex that it is simply too much work for the buyer to go it alone, especially those that need extensive configuration, imported data and integration and before they are useful, and in these cases the buyer will actually prefer to lean on the advice and assistance of a salesperson.

2. Do you see a strong correlation between trial sign-up and product usage and the conversion to a paid customer (as compared to say, downloading a white paper)?

Joel: Absolutely. Test driving the real thing demonstrates more interest and requires more commitment on the part of the buyer than reading a piece of content.

3. Do you see marketing automation systems, which you mention in your article, integrating trial usage related metrics into their lead scoring algorithms?

Joel: If they are smart marketers they will. As I mentioned, trial and usage demonstrate interest and commitment. If the statistics are segmented, e.g, what is tried and used, they also show interest at the feature/function level, which can be used in both marketing campaigns and sales calls. For all these reasons, trial and usage statistics are probably some of the strongest indicators you could integrate into a lead score.

Of course, I very much agree with Joel. Participating in a trial is the best possible indicator of potential customer commitment. Of course, I also believe that not all trial customers are created equal. As we discussed in a previous post: a prospect with many users and many hours of trial usage is a hotter prospect than a trial user who only logged in once. And yes, of course Totango can help you figure out who these hot prospects are!